In an interview with the Wall Street Journal last week, commented on the US Dollar’s (USD) strong performance against the Chinese yuan, noting that the rapid increase in the value of USD is creating a challenging environment for US-based companies to compete with Chinese firms.

“Our companies can’t compete with them [Chinese companies] now because our currency is too strong. And it’s killing us,” said Trump.

Trump’s remarkable statement on the current relationship between USD and the Chinese yuan (CNY) led to the decline of the Dollar Index (DXY), which fell by 3 per cent from its previous 14-year high reached on January 3, 2017. Although Piotr Matys, Rabobank emerging market strategist, claimed that the correction of the US Dollar was inevitable, the correlation between Trump’s statement and the decline of DXY was quite evident.

The abrupt decrease in the value of the US Dollar led to the fall of stock markets in Asia and Europe. The Shanghai Stock Exchange Composite Index dropped by roughly 15,000 points almost immediately after the WSJ interview with Trump was released.

Struggling stock markets and slight uncertainty in the global financial market spurred the demand for safe haven assets like gold and bitcoin. The value of bitcoin increased by nearly $100 since the statement of Trump, rising from $827 to $925.

The unforeseen surge in the price of bitcoin helped the digital currency recover from its previous decline from the all-time high value of $1,114 reached on January 5 caused by false speculations and exaggerated media coverage on the status of the Chinese bitcoin market. At the time, several mainstream media outlets including Nikkei, BBC, and Fortune falsely portrayed the relationship between Chinese bitcoin exchanges and regulators, engaging in severely flawed narratives.

According to dataprovided by the Dollar Vigilante, the price of gold recorded a 1 percent overnight spike and is currently showing a 5 percent year-to-date increase.

The European bitcoin startup noted that members of the Trump team is composed of pro-bitcoin investors as well as active members within the bitcoin community. For Instance, Peter Thiel, the early investor of bitcoin service provider Bitpay and bitcoin computer manufacturer 21 Inc., is serving the Trump administration as an Advisor.

“But even if the Trump administration will not necessarily embrace Bitcoin, it might still have an impact in a different way. Trump has already destabilized some of the international relationships the US had.” said the Bitwala team.

Saxo Bank, a multi-billion dollar investment bank, also revealed a similar prediction to Bitwala, claiming that the price of bitcoin is likely to reach $2,000 within 2017. In a report entitled “Outrageous Predictions For 2017,” analysts at Saxo Bank stated:

“If the banking system, as well as sovereigns such as Russia and China, move to accept Bitcoin as a partial alternative to the USD and the traditional banking and payment system, then we could see Bitcoin easily triple over the next year going from the current $700 level to +$2,100 as the Blockchain’s decentralized system, an inability to dilute the finite supply of Bitcoins as well as low to no transaction costs gains more traction and acceptance globally.”

US President Donald Trump has already begun to affect the price of bitcoin with his statements on the performance of US dollars and its relationship with the Chinese yuan. Analysts expect a larger impact on the value of gold and bitcoin as the Trump administration takes over the White House.

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